London, UK -- (MARKET WIRE) -- November 9, 2006 --
BT Group Half Year Results and Interim Report
Chairman's Statement
These strong half year results show sustained momentum across the business with
revenues up 3 per cent and earnings per share before specific items up 19 per
cent.
I am pleased to report that we will be paying an interim dividend of 5.1 pence,
up 19 per cent on last year, showing our continued commitment to improving
shareholder returns and our confidence for the future.
Sir Christopher Bland, 8 November 2006
Review
These results show another strong team performance with every part of the
business playing its part. Revenue increased 3 per cent with continued strong
growth in new wave revenue, up 20 per cent, driven by our networked IT services,
broadband and mobility businesses. Total networked IT services contract wins
amounted to GBP4.0 billion over the last twelve months. BT had 9.3 million
wholesale broadband connections at 30 September 2006, including 838,000 local
loop unbundled lines, an increase of 2.8 million connections year on year. The
strong growth in new wave revenue more than offset the 4 per cent decline in
traditional revenue.
Group profit before taxation, specific items and leaver costs increased by 17
per cent driven by operational efficiencies and a reduction in net finance
costs, partly offset by the costs of supporting the growth in new wave
activities. Reported profit before taxation, including specific items and leaver
costs, was 26 per cent higher than last year. Specific items for the half year
were GBP3 million (see note 2) and principally comprise costs of GBP23 million
relating to the further rationalisation of the group's office portfolio, partly
offset by a profit of GBP20 million arising from the group's partial disposal of
its interest in an associated undertaking.
Earnings per share before specific items and leaver costs were 11.8 pence, an
increase of 20 per cent. Reported earnings per share, including specific items
and leaver costs, were 28 per cent higher at 11.3 pence.
Net debt was GBP8,079 million, GBP54 million below last year. Free cash flow
generated in the first half amounted to GBP321 million.
An interim dividend of 5.1 pence per share will be paid on 12 February 2007 to
shareholders on the register on 29 December 2006.
Our performance underpins our confidence that we will continue to grow revenue,
EBITDA, earnings per share and dividends this financial year. Revenue growth
will continue to be fuelled by new wave services; EBITDA improvement will be
driven by the continued growth in BT Retail's profitability and an acceleration
through the year of the EBITDA growth in BT Global Services. We are confident in
our ability to improve shareholder returns and accelerate the strategic
transformation of the business.
This advertisement is a summary of the interim results of BT Group plc ("the
group") for the six months ended 30 September 2006. The full interim results
statement, including the group's results for the three months ended 30 September
2006, is available on the internet at
www.btplc.com/Sharesandperformance. If you
have any queries as a shareholder please call Freefone 0808 100 4141.
BT Group plc 81 Newgate Street, London EC1A 7AJ
Independent Review Report to BT Group plc
Introduction
We have been instructed by the group to review the financial information for the
six months ended 30 September 2006, which comprises the summarised group income
statement, group statement of recognised income and expense, group cash flow
statement and group balance sheet at 30 September 2006. We have read the other
information contained in the interim report and considered whether it contains
any apparent misstatements or material inconsistencies with the financial
information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The Listing Rules
of the Financial Services Authority require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes, and
the reasons for them, are disclosed.
This interim report has been prepared in accordance with the basis set out in
note 1.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies have been
consistently applied. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit and therefore provides a lower level
of assurance. Accordingly we do not express an audit opinion on the financial
information. This report, including the conclusion, has been prepared for and
only for the group for the purpose of the Listing Rules of the Financial
Services Authority and for no other purpose. We do not, in producing this
report, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2006.
PricewaterhouseCoopers LLP, Chartered Accountants
1 Embankment Place, London WC2N 6RH
8 November 2006
Summarised statements
Group income statement for the six months ended 30 September
(unaudited) 2006 2005
GBPm GBPm
Revenue 9,805 9,498
_______ _______
Operating profit 1,318 1,222
Finance costs (1,293) (1,392)
Finance income 1,192 1,150
Share of profits
of associates and
joint ventures 7 8
Profit on disposal of associate 20 -
_______ _______
Profit before taxation 1,244 988
Taxation (305) (243)
_______ _______
Profit for the period 939 745
======= =======
Earnings per share
- basic 11.3p 8.8p
- diluted 11.1p 8.7p
Earnings per share
before specific items
(note 2)
- basic 11.3p 9.5p
- diluted 11.1p 9.3p
Interim dividend
proposed per share 5.1p 4.3p
Prior year final dividend
paid per share 7.6p 6.5p
Group statement of recognised income and expense for the
six months ended 30 September
(unaudited) 2006 2005
GBPm GBPm
Profit for the period 939 745
_______ _______
Actuarial (losses) gains
on defined benefit
pension schemes (369) 1,090
Net gains on revaluation
of available-for-sale
investments - 1
Net gains (losses) on
cash flow hedges 61 (5)
Exchange differences
on translation of
foreign operations (72) (4)
Tax on items taken
directly to equity 82 (327)
_______ _______
Net (losses) gains
recognised directly
in equity 298 755
_______ _______
Total recognised
income and expense
for the period 641 1,500
_______ _______
Group cash flow statement for the six months ended 30 September
(unaudited) 2006 2005
GBPm GBPm
Net cash inflow from
operating activities 2,193 2,104
Net cash used in
investing activities (2,059) (767)
Net cash used in
financing activities (997) (1,138)
Effects of exchange
rate changes - 23
_______ _______
Net (decrease)
increase in cash
and cash equivalents (863) 222
Cash and cash
equivalents at
beginning of period 1,784 1,310
_______ _______
Cash and cash
equivalents at
end of period 921 1,532
======= =======
Free cash flow 321 377
_______ =======
Group balance sheet
(unaudited) 30 September 30 September 31 March
2006 2005 2006
GBPm GBPm GBPm
Non current assets 18,164 17,977 17,978
Current assets 6,586 9,130 6,722
_______ _______ _______
Total assets 24,750 27,107 24,700
Current liabilities 10,053 11,596 9,480
_______ _______ _______
Total assets less
current liabilities 14,697 15,511 15,220
======= ======= =======
Non current liabilities 13,156 14,755 13,613
Equity shareholders' funds 1,494 707 1,555
Minority interest 47 49 52
_______ _______ _______
Total equity 1,541 756 1,607
_______ _______ _______
14,697 15,511 15,220
======= ======= =======
Notes
1 The financial information set out in these interim financial
results has been prepared in accordance with the Listing Rules
of the Financial Services Authority. The accounting policies
which have been applied to prepare these interim financial
results are the same as those used for preparation of the
audited consolidated financial statements for the year
ended 31 March 2006.
2 The results as shown in the summarised income statement are
reported inclusive of specific items. Specific items comprise
significant one off or unusual items, which are separately
identified and disclosed. This is consistent with the way that
financial performance is measured by management and provides a
meaningful analysis of the trading results of the group. Specific
items recognised for the six months ended 30 September 2006
were a net charge before taxation of GBP3 million (2005: GBP82
million). Costs of GBP23 million relating to the further
rationalisation of the group's office portfolio were incurred
(2005: GBP12 million). This was partly offset by a profit of
GBP20 million arising from the group's disposal of 6 per cent
of its equity interest in Tech Mahindra Limited, an associated
undertaking, reducing the group's holding to 36 per cent. In
the prior year, a provision of GBP70 million was recognised
relating to the incremental and directly attributable costs
in connection with creating the Openreach line of business.
This information is provided by RNS
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